The expected price of the console has been set at 40,000 yen. That’s roughly $430. It’s a big saving over what the PS3 launched at, which was $500. Such a price would also instantly put it in contention with the Wii U, which sells for $375 (Deluxe Edition), while at the same time being vastly more powerful than Nintendo’s machine.

A cheaper launch price shouldn’t really come as a shock to anyone. Remember, when the PS3 launched Blu-ray was a very new and expensive technology. Sony also used the Cell architecture, which again wasn’t exactly cheap. This time around Blu-ray is still the disc format of choice, but drives are now very cheap. Sony is also expected to be using a much more PC-like set of components, which again will save on manufacturing costs. The PS4 may still sell at a loss, but it won’t be anywhere near as bad as the $800-$1000 per unit costs we were hearing for the first generation PS3s.

Sony will also want to be aggressive on price because the launch looks likely to happen at the same time or slightly ahead of the next Xbox. If possible, the price needs to match or undercut Microsoft’s machine. However, if the always-connected rumor turns out to be true, not many people will be buying the new Xbox anyway.